O2 strikes payments deal with Facebook, Google and Microsoft

Shoppers can charge payments for digital products to their phone bill

Telefónica – parent company of UK mobile operator O2 – has secured global framework agreements with with Facebook, Google, Microsoft and BlackBerry maker Research In Motion (RIM) to enable customers to purchase digital goods using their mobile phones.

With Telefónica's Direct to Bill payments service, customers can buy apps and make in-app purchases using their phones, and charge the payments directly to their phone bill or prepaid credit account, removing the need for a credit card.

The agreements with each of the technology companies are all slightly different; Facebook has integrated operator billing into its existing payments platform, Google and RIM will add it as a payment option in their mobile apps stores, and Microsoft will make it the default payment option for Telefónica subscribers making purchases in Windows Phone Marketplace.

Telefónica believes the service will be particularly popular in Latin America, where 60% of the population do not have bank accounts.

Meanwhile, recent research from MACH found that over a third of European smartphone users have paid for applications via operator billing. In Germany, 400,000 customers are already using Telefónica's Direct to Bill every month.

The company said that its existing billing relationships with customers will help to build trust in mobile payments and drive the monetisation of mobile content.

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“Few organisations can claim to have a direct billing relationship with hundreds of millions of customers globally,' said Matthew Key, Chairman and CEO of Telefónica Digital – the division set up to deliver new growth for Telefónica through R&D, venture capital, global partnerships and digital services.

“We believe that Direct to Bill will become an increasingly significant part of the overall mobile commerce market.”

Dan Rose, vice president of partnerships at Facebook, added that the deal would simplify the purchase process for consumers and expand pricing options for mobile web developers.

The Direct to Bill payments service is now rolling out in Europe and will be live in 14 of Telefonica’s operating businesses globally by the end of the year.

The new global framework is part of Telefónica's 'Beyond Connectivity' strategy to take advantage of new opportunities beyond traditional network connectivity. Other new initiatives include an agreement with Etisalat to develop business opportunities in Machine-to-Machine (M2M), financial services, cloud computing, eHealth, mobile advertising and over-the-top communications.

The company also reiterated its support for Mozilla’s HTML5 platform, which it was recently confirmed will be branded Firefox OS, and announced plans to launch the first devices built to this standard in Brazil in early 2013.

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